First Reliance Bancshares Reports Fourth Quarter 2024 Results

First Reliance Bancshares, Inc. (OTC:FSRL), the holding company for First Reliance Bank (collectively, “First Reliance” or the “Company”), today announced its financial results for the fourth quarter of 2024.

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Fourth Quarter 2024 Highlights

— Net income increased 18.3% for the fourth quarter of 2024 to $0.9 million, or $0.11 per diluted share, compared to $0.8 million, or $0.10 per diluted share, for the fourth quarter of 2023. Operating earnings, which excludes securities losses, net of tax, gain/(loss) on disposal/write down fixed assets and right of use assets, net of tax, and expenses related to branch sale, net of tax, were $1.7 million, or $0.21 per diluted share, for the fourth quarter of 2024, compared to $1.4 million, or $0.17 per diluted share, in the fourth quarter of 2023.

— For calendar year 2024, net income increased $1.3 million to $5.9 million, or $0.71 per diluted share, compared to 2023 which was $4.6 million, or $0.56 per diluted share, an increase of $0.15 per diluted share, or 26.8%. Operating net income increased $1.0 million, or 17.2% to $6.8 million, or $0.82 per diluted share, compared to 2023 which was $5.8 million, or $0.71 per diluted share, an increase of $0.11 per diluted share, or 15.5%.

— Book value per share increased $0.91, or 10.4%, from $8.77 per share at December 31, 2023, to $9.68 per share at December 31, 2024. Tangible book value per share increased $0.91, or 10.5%, from $8.68 per share at December 31, 2023, to $9.59 per share at December 31, 2024.

— Net interest income for the quarter was $8.4 million, which represents an increase of $1.1 million, or 15.6%, compared to the same quarter one year ago. On a linked quarter basis, the increase was $300,000, or 3.7%.

— Net interest margin increased during the quarter to 3.38% at December 31, 2024, compared to 3.27% at September 30, 2024, and increased 22 basis points compared to the same period in 2023.

— Total loans held for investment increased $14.5 million, or 7.9% annualized, to $753.7 million at December 31, 2024, from $739.2 million at September 30, 2024.

— Total deposits decreased $0.5 million, or 0.2% annualized, to $951.4 million at December 31, 2024, from $951.9 million at September 30, 2024.

— Asset quality remained strong with nonperforming assets totaling $1.2 million, or 0.11% of total assets at December 31, 2024, compared to $924 thousand, or 0.09% of total assets at September 30, 2024.

Rick Saunders, Chief Executive Officer, commented: “I am pleased that we were able to grow our operating EPS by over 17% for the year while also increasing our tangible book value per share by 10.5%. We expanded NIM another 11 bps this quarter and go into 2025 with a strong loan pipeline. Credit quality remained steady with low net charge offs and low nonperforming assets. Managing expenses will be one of our top priorities to compliment what we think will be increased revenue in 2025 vs. 2024. Our markets are some of the best in the United States and we remain focused on growing our client base by providing exceptional service and solutions to meet their banking needs.”

Financial Summary Three Months Ended Twelve Months Ended Dec 31 Sep 30 Jun 30 Mar 31 Dec 31 Dec 31 Dec 31($ in thousands, except per share data) 2024 2024 2024 2024 2023 2024 2023Earnings:Net income available to common shareholders $ 918 $ 1,825 $ 1,942 $ 1,238 $ 776 $ 5,923 $ 4,603Operating earnings (Non-GAAP) 1,698 1,950 1,942 1,223 1,424 6,813 5,812Earnings per common share, diluted 0.11 0.22 0.24 0.15 0.10 0.71 0.56Operating earnings, diluted (Non-GAAP) 0.21 0.24 0.24 0.15 0.17 0.82 0.71Total revenue(1) 9,809 9,855 10,226 9,690 8,285 39,580 35,892Net interest margin 3.38% 3.27% 3.20% 3.11% 3.16% 3.25% 3.19%Return on average assets(2) 0.35% 0.69% 0.75% 0.49% 0.32% 0.57% 0.47%Return on average equity(2) 4.66% 9.60% 10.69% 7.01% 4.70% 7.97% 7.00%Efficiency ratio(3) 86.42% 76.90% 75.21% 81.04% 89.83% 79.84% 82.78% As of Dec 31 Sep 30 Jun 30 Mar 31 Dec 31($ in thousands) 2024 2024 2024 2024 2023Balance Sheet:Total assets $ 1,067,104 $ 1,071,480 $ 1,058,395 $ 1,027,616 $ 974,157Total loans receivable 753,738 739,219 739,433 725,234 705,672Total deposits 951,411 951,948 899,799 881,309 858,597Total transaction deposits(4) to total deposits 38.64% 38.82% 39.18% 39.86% 41.31%Loans to deposits 79.22% 77.65% 82.18% 82.29% 82.19%Bank Capital Ratios:Total risk-based capital ratio 13.48% 13.56% 13.34% 13.46% 13.86%Tier 1 risk-based capital ratio 12.43% 12.51% 12.28% 12.37% 12.75%Tier 1 leverage ratio 9.96% 9.87% 10.01% 10.16% 10.32%Common equity tier 1 capital ratio 12.43% 12.51% 12.28% 12.37% 12.75%Asset Quality Ratios:Nonperforming assets as a percentage of 0.11% 0.09% 0.03% 0.03% 0.03%total assetsAllowance for credit losses as a percentage of 1.12% 1.13% 1.15% 1.17% 1.19%total loans receivableAnnualized quarterly net charge-offs as a percentage of average total loans receivable 0.00% 0.03% 0.05% 0.06% 0.00%

Footnotes to table located at the end of this release.

CONDENSED CONSOLIDATED INCOME STATEMENTS – Unaudited Three Months Ended Twelve Months Ended Dec 31 Sep 30 Jun 30 Mar 31 Dec 31 Dec 30($ in thousands, except per share data) 2024 2024 2024 2024 2023 2024 2023Interest incomeLoans $ 11,053 $ 10,930 $ 10,746 $ 10,085 $ 9,678 $ 42,814 $ 36,171Investment securities 2,015 1,969 1,875 1,972 1,832 7,831 6,142Other interest income 512 623 419 291 396 1,845 2,076Total interest income 13,580 13,522 13,040 12,348 11,906 52,490 44,389Interest expenseDeposits 4,613 4,833 4,652 4,332 4,076 18,430 12,546Other interest expense 564 585 722 808 558 2,679 2,870Total interest expense 5,177 5,418 5,374 5,140 4,634 21,109 15,416Net interest income 8,403 8,104 7,666 7,208 7,272 31,381 28,973Provision for credit losses 141 (83) 55 207 (118) 320 369Net interest income after provision for loan 8,262 8,187 7,611 7,001 7,390 31,061 28,604lossesNoninterest incomeMortgage banking income 1,207 805 1,416 1,375 694 4,803 3,821Service fees on deposit accounts 327 327 307 336 336 1,297 1,374Debit card and other service charges, 550 528 568 519 544 2,165 2,160commissions, and feesIncome from bank owned life insurance 108 105 103 102 99 418 529Loss on sale of securities, net (146) (162) – – (802) (308) (1,526)Gain (loss) on disposal / write down of fixed assets (838) – – 20 – (818) -Other income 198 148 166 130 143 642 561Total noninterest income 1,406 1,751 2,560 2,482 1,014 8,199 6,919Noninterest expenseCompensation and benefits 5,028 4,682 4,693 4,878 4,558 19,281 18,274Occupancy and equipment 890 848 837 841 798 3,416 3,429Data processing, technology, and communications 1,184 994 1,119 1,039 985 4,336 3,614Professional fees 268 265 96 110 56 739 420Marketing 103 66 102 160 104 431 687Other 1,003 723 844 826 942 3,396 3,286Total noninterest expense 8,476 7,578 7,691 7,854 7,443 31,599 29,710Income before provision for income taxes 1,192 2,360 2,480 1,629 961 7,661 5,813Income tax expense 273 535 538 391 185 1,737 1,210Net income available to common shareholders $ 919 $ 1,825 $ 1,942 $ 1,238 $ 776 $ 5,924 $ 4,603Add back loss (gain) on fixed assets, net of tax 646 (15) 631Add back expenses related to branch sale, net of tax 21 21Add back securities losses, net of tax 113 125 – – 648 238 1,208Operating earnings (Non-GAAP) $ 1,699 $ 1,950 $ 1,942 $ 1,223 $ 1,424 $ 6,814 $ 5,811Weighted average common shares – basic 7,851 7,847 7,851 7,837 7,826 7,847 7,823Weighted average common shares – diluted 8,274 8,221 8,260 8,217 8,164 8,294 8,164Basic net income per common share * $ 0.12 $ 0.23 $ 0.25 $ 0.16 $ 0.10 $ 0.75 $ 0.59Diluted net income per common share * $ 0.11 $ 0.22 $ 0.24 $ 0.15 $ 0.10 $ 0.71 $ 0.56Operating earnings per common share (Non-GAAP) * $ 0.22 $ 0.25 $ 0.25 $ 0.16 $ 0.18 $ 0.87 $ 0.74Operating earnings per diluted common share (Non-GAAP) * $ 0.21 $ 0.24 $ 0.24 $ 0.15 $ 0.17 $ 0.82 $ 0.71* note that the sum of the quarters may not equal the YTD result due to rounding of earnings per share each quarter, given the weightedaverage shares outstanding basic and diluted.

Net income for the three months ended December 31, 2024, was $0.9 million, or $0.11 per diluted common share, compared to $0.8 million, or $0.10 per diluted common share, for the three months ended December 31, 2023. On an operating basis, fourth quarter of 2024 diluted EPS was $0.21, compared to $0.17 diluted EPS for the fourth quarter of 2023. Both amounts include adding back the impact of securities losses, after tax, of $113 thousand and $648 thousand, respectively. The fourth quarter of 2024 also includes adding back losses related to write downs of fixed assets and right of use assets totaling $646 thousand and cost related to branch sales of $21 thousand, net of tax. Net income for the calendar year 2024, totaled $5.9 million, or $0.71 per diluted common share, compared to $4.6 million, or $0.56 per diluted common share, for the calendar year 2023. On an operating basis, diluted EPS was $0.82 per diluted common share or operating net income of $6.8 million, for 2024, compared to $0.71 per diluted common share or operating net income of $5.8 million, for 2023.

Noninterest income for the three months ended December 31, 2024, was $1.4 million, an increase of $0.4 million from $1.0 million for the same period in 2023. Noninterest income was primarily driven by mortgage banking income which totaled $1.2 million in the fourth quarter of 2024 compared to $0.7 million in the fourth quarter of 2023. This increase was primarily driven by increases in the gain on sale of mortgage loans of $212 thousand and the valuation of the mortgage servicing right asset of $203 thousand. In both the fourth quarter of 2024 and 2023, the company recognized securities losses, $146 thousand and $802 thousand, respectively. The fourth quarter of 2024 securities loss was $656 thousand less than the loss recognized in the fourth quarter of 2023. These two increases (in mortgage banking income and securities losses) were partially offset by losses recognized on right of use assets and fixed assets in the fourth quarter of 2024.

For the twelve months ended December 31, 2024, noninterest income increased by $1.3 million, driven by improved mortgage banking income of $982 thousand primarily related to more sales volume within the secondary market, and less securities losses that were $1.2 million less in 2024 compared to 2023. These increases were partially offset by a decline in bank owned life insurance income of $111 thousand and losses recognized on fixed assets and right of use (leased) asset totaling $818 thousand.

Noninterest expense for the three months ended December 31, 2024, was $8.5 million, an increase of $1.1 million from $7.4 million for the same period in 2023. This increase in expense was primarily driven by an increase in higher compensation and benefits of $470 thousand; higher data processing and technology cost of $199 thousand and higher professional fees totaling $212 thousand.

Noninterest expense for the twelvemonths ended December 31, 2024, was $31.6 million and increased $1.9 million over the same period one year ago. This increase in noninterest expense was primarily related to compensation and benefits of $1.0 million primarily attributable to mortgage commissions and employee health benefits; an increase in data processing and technology totaling $722 thousand resulting from higher core processor cost and software expense; and higher professional fees of $319 thousand in legal and consulting. These increases were partially offset by lower marketing cost of $256 thousand.

Fixed Assets and Right of Use Assets

During the fourth quarter of 2024 the Company wrote off two leases totaling $538 thousand. One was a land lease that the company no longer intends to use which totaled $504 thousand. The other lease related to a facility that was consolidated into the main banking location in Charleston which expires in mid-2025 and totaled $34 thousand. These two written off leases will reduce annual occupancy cost by $180 thousand in 2025 and by $147 thousand in 2026, 2027 and part of 2028.

The fixed asset that was written down by $300,000 relates to a parcel of land in North Charleston that the company owns, and it was written down to fair value and remains for sale.

NET INTEREST INCOME AND MARGIN – Unaudited – QTD For the Three Months Ended December 31, 2024 September 30, 2024 December 31, 2023 Average Income/ Yield/ Average Income/ Yield/ Average Income/ Yield/($ in thousands) Balance Expense Rate Balance Expense Rate Balance Expense RateAssetsInterest-earning assets:Federal funds sold and interest-bearing deposits $ 44,366 $ 485 4.35% $ 50,030 $ 588 4.68% $ 30,212 $ 370 4.86%Investment securities 179,750 2,015 4.46% 173,728 1,969 4.51% 161,824 1,832 4.49%Nonmarketable equity securities 1,524 27 6.99% 1,509 35 9.19% 1,420 26 7.36%Loans held for sale 21,610 322 5.93% 21,629 347 6.38% 13,860 274 7.85%Loans 741,672 10,731 5.76% 737,666 10,583 5.71% 706,002 9,404 5.28%Total interest-earning assets 988,922 13,580 5.46% 984,562 13,522 5.46% 913,318 11,906 5.17%Allowance for credit losses (8,317) (8,491) (8,484)Noninterest-earning assets 78,137 78,402 78,914Total assets $ 1,058,742 $ 1,054,473 $ 983,748Liabilities and Shareholders' EquityInterest-bearing liabilities:NOW accounts $ 140,981 $ 245 0.69% $ 138,726 $ 236 0.68% $ 142,290 $ 269 0.75%Savings & money market 405,445 2,910 2.86% 384,155 2,941 3.05% 334,068 2,331 2.77%Time deposits 160,417 1,458 3.62% 175,921 1,656 3.74% 165,466 1,476 3.54%Total interest-bearing deposits 706,843 4,613 2.60% 698,802 4,833 2.75% 641,824 4,076 2.52%FHLB advances and other borrowings 16,332 202 4.93% 15,979 226 5.63% 15,001 193 5.09%Subordinated debentures 25,750 362 5.59% 25,743 359 5.55% 25,719 365 5.63%Total interest-bearing liabilities 748,925 5,177 2.75% 740,524 5,418 2.91% 682,544 4,634 2.69%Noninterest bearing deposits 217,863 224,121 221,275Other liabilities 13,118 13,807 13,957Shareholders' equity 78,836 76,021 65,972Total liabilities and shareholders' equity $ 1,058,742 $ 1,054,473 $ 983,748Net interest income (tax equivalent) / interest $ 8,403 2.71% $ 8,104 2.55% $ 7,272 2.48%rate spreadNet Interest Margin 3.38% 3.27% 3.16%Cost of funds, including noninterest-bearing deposits 2.13% 2.23% 2.03%

Net interest income for the three months ended December 31, 2024, was $8.4 million compared to $7.3 million for the three months ended December 31, 2023. This increase was the result of a larger increase in interest income of $1.7 million than the increase in interest expense of $0.5 million. This resulted in an improved net interest margin of 22 basis points to 3.38% from 3.16% one year ago, led by the loan portfolio yield which improved by 48 basis points. The yields on interest-bearing liabilities were only slightly higher and increased by 6 basis points, net comparing 2024 to 2023. There were no outstanding FHLB advances at December 31, 2024 and September 30, 2024. In addition, the total cost of funds, including noninterest-bearing deposits, increased to 2.13% in the fourth quarter of 2024, compared to 2.03% in the fourth quarter of 2023.

NET INTEREST INCOME AND MARGIN – Unaudited – YTD For the Twelve Months Ended December 31, 2024 December 31, 2023 Average Income/ Yield/ Average Income/ Yield/(dollars in thousands) Balance Expense Rate Balance Expense RateAssetsInterest-earning assetsFederal funds sold and interest-bearing deposits $ 38,357 $ 1,718 4.48% $ 43,739 $ 1,969 4.50%Investment securities 172,932 7,831 4.53% 161,201 6,142 3.81%Nonmarketable equity securities 1,803 127 7.01% 1,774 108 6.08%Loans held for sale 20,827 1,369 6.57% 14,131 995 7.04%Loans 731,688 41,445 5.66% 687,682 35,175 5.12%Total interest-earning assets 965,607 52,490 5.44% 908,527 44,389 4.89%Allowance for loan losses (8,427) (8,170)Noninterest-earning assets 78,987 78,277Total assets $ 1,036,167 $ 978,634Liabilities and Shareholders' EquityInterest-bearing liabilitiesNOW accounts $ 140,923 $ 1,018 0.72% $ 142,082 $ 764 0.54%Savings & money market 373,626 11,008 2.95% 318,347 7,731 2.43%Time deposits 172,522 6,404 3.71% 143,422 4,051 2.82%Total interest-bearing deposits 687,071 18,430 2.68% 603,851 12,546 2.08%FHLB advances and other borrowings 22,313 1,221 5.47% 33,076 1,441 4.36%Subordinated debentures 25,739 1,458 5.67% 25,707 1,429 5.56%Total interest-bearing liabilities 735,123 21,109 2.87% 662,634 15,416 2.33%Noninterest bearing deposits 213,190 236,468Other liabilities 13,508 13,798Shareholders' equity 74,346 65,734Total liabilities and shareholders' equity $ 1,036,167 $ 978,634Net interest income (tax equivalent) / interest $ 31,381 2.57% $ 28,973 2.56%rate spreadNet Interest Margin 3.25% 3.19%Cost of funds,including noninterest bearing deposits 2.23% 1.71%

Net interest income for the twelve months ended December 31, 2024, totaled $31.4 million compared to $29.0 million for the twelve months ended December 31, 2023, an increase of $2.4 million. The net interest margin was 3.25% for 2024 compared to 3.19% for 2023. The yield on interest-earning assets increased by 55 basis points to 5.44% in 2024. Led by loans and securities, the yield improved by 54 basis points within the loan portfolio and by 72 basis points within the securities portfolio. For interest-bearing liabilities, the rate paid totaled 2.87% compared to 2.33% in the same period one year ago, reflecting an increase in yield in all categories. The total cost of funds, including noninterest-bearing deposits, was 2.23% compared to 1.71% in 2023.

CONDENSED CONSOLIDATED BALANCE SHEETS – Unaudited As of Dec 31 Sep 30 Jun 30 Mar 31 Dec 31($ in thousands) 2024 2024 2024 2024 2023AssetsCash and cash equivalents:Cash and due from banks $ 4,604 $ 4,730 $ 5,669 $ 5,482 $ 4,354Interest-bearing deposits with banks 42,623 61,934 41,391 36,173 17,590Total cash and cash equivalents 47,227 66,664 47,060 41,655 21,944Investment securities:Investment securities available for sale 175,846 177,641 173,298 171,075 171,400Other investments 886 883 2,788 2,548 1,078Total investment securities 176,732 178,524 176,087 173,623 172,478Mortgage loans held for sale 20,974 19,929 25,776 18,307 7,156Loans receivable:Loans 753,738 739,219 739,433 725,234 705,672Less allowance for credit losses (8,434) (8,317) (8,498) (8,497) (8,393)Loans receivable, net 745,304 730,902 730,935 716,737 697,279Property and equipment, net 21,353 21,861 22,040 22,185 22,298Mortgage servicing rights 13,410 12,690 12,680 12,226 11,638Bank owned life insurance 18,608 18,501 18,396 18,293 18,191Deferred income taxes 7,709 6,292 7,612 7,990 7,775Other assets 15,787 16,117 17,809 16,600 15,398Total assets 1,067,104 1,071,480 1,058,395 1,027,616 974,157LiabilitiesDeposits $ 951,411 $ 951,948 $ 899,799 $ 881,309 $ 858,597Federal Home Loan Bank advances (FHLB) – – 40,000 35,000 5,000Federal funds and repurchase agreements – – 408 – 307Subordinated debentures 15,444 15,436 15,428 15,421 15,413Junior subordinated debentures 10,310 10,310 10,310 10,310 10,310Reserve for unfunded commitments 428 410 364 398 407Other liabilities 11,755 12,866 17,590 13,070 12,727Total liabilities 989,348 990,970 983,899 955,508 902,761Shareholders' equityPreferred stock – Series D non-cumulative, no par 1 1 1 1 1valueCommon Stock – $.01 par value; 20,000,000 shares 88 88 88 88 88authorizedTreasury stock, at cost (5,758) (5,285) (5,216) (4,965) (4,821)Nonvested restricted stock (2,340) (2,444) (2,463) (2,900) (2,518)Additional paid-in capital 55,848 55,763 55,645 56,134 55,471Retained earnings 39,671 38,753 36,928 34,986 33,748Accumulated other comprehensive (loss) income (9,754) (6,366) (10,487) (11,236) (10,573)Total shareholders' equity 77,756 80,510 74,496 72,108 71,396Total liabilities and shareholders' equity $ 1,067,104 $ 1,071,480 $ 1,058,395 $ 1,027,616 $ 974,157

First Reliance cash and cash equivalents totaled $47.2 million at December 31, 2024, compared to $66.7 million at September 30, 2024. Cash with the Federal Reserve Bank totaled $41.8 million compared to $61.6 million at September 30, 2024.

First Reliance does not have any Held-to-Maturity (HTM) securities for any reported period. All debt securities were classified as Available-For-Sale (AFS) securities with balances of $175.8 million and $177.6 million, at December 31, 2024 and September 30, 2024, respectively. The unrealized loss recorded on AFS securities totaled $12.9 million as of December 31, 2024, compared to $8.4 million at September 30, 2024, an increase during the fourth quarter of 2024 of $4.5 million (before taxes).

As of December 31, 2024, deposits decreased slightly by $537 thousand, or 0.2% annualized. See page 10 for detail on the deposit balance changes over the past 5 quarters.

The Company had no outstanding borrowings with the FHLB of Atlanta at December 31, 2024 and September 30, 2024. The Company had credit availability in excess of $310.8 million with the FHLB of Atlanta, subject to collateral requirements.

First Reliance also has access to approximately $25.4 million through the Federal Reserve Bank discount window with posted collateral. There are currently no borrowings against the Federal Reserve Bank discount window.

COMMON STOCK SUMMARY – Unaudited As of Dec 31 Sep 30 Jun 30 Mar 31 Dec 31(shares in thousands) 2024 2024 2024 2024 2023Voting common shares outstanding 8,833 8,820 8,819 8,785 8,772Treasury shares outstanding (800) (751) (743) (649) (633)Total common shares outstanding 8,033 8,069 8,076 8,136 8,139Book value per common share $ 9.68 $ 9.98 $ 9.22 $ 8.86 $ 8.77Tangible book value per common share – Non-GAAP(5) $ 9.59 $ 9.89 $ 9.13 $ 8.77 $ 8.68Stock price:High $ 10.24 $ 10.59 $ 8.30 $ 8.65 $ 9.00Low $ 9.16 $ 7.60 $ 7.60 $ 7.70 $ 6.91Period end $ 9.59 $ 10.14 $ 7.90 $ 8.15 $ 8.57ASSET QUALITY MEASURES – Unaudited As of Dec 31 Sep 30 Jun 30 Mar 31 Dec 31($ in thousands) 2024 2024 2024 2024 2023Nonperforming AssetsCommercialOwner occupied RE $ 44 $ 46 $ 49 $ – $ -Non-owner occupied RE 646 701 – – 86Construction 66 – 62 – -Commercial business 328 57 12 12 99ConsumerReal estate 42 44 46 48 -Home equity – – – – -Construction – – – – -Other 64 61 66 52 8Nonaccruing loan modifications – – – 56 56Total nonaccrual loans $ 1,190 $ 909 $ 235 $ 168 $ 249Other assets repossessed 11 15 75 114 47Total nonperforming assets $ 1,201 $ 924 $ 310 $ 282 $ 296Nonperforming assets as a percentage of:Total assets 0.11% 0.09% 0.03% 0.03% 0.03%Total loans receivable 0.16% 0.12% 0.04% 0.04% 0.04%Accruing loan modifications $ 400 $ 428 $ 460 $ 970 $ 947 Three Months Ended Dec 31 Sep 30 Jun 30 Mar 31 Dec 31($ in thousands) 2024 2024 2024 2024 2023Allowance for Credit LossesBalance, beginning of period $ 8,317 $ 8,498 $ 8,497 $ 8,393 $ 8,430Loans charged-off 24 69 102 195 108Recoveries of loans previously charged-off 18 17 14 82 109Net charge-offs (recoveries) 6 52 88 113 (1)Provision for credit losses (release) 123 (129) 89 217 (38)Balance, end of period $ 8,434 $ 8,317 $ 8,498 $ 8,497 $ 8,393Allowance for credit losses to gross loans receivable 1.12% 1.13% 1.15% 1.17% 1.19%Allowance for credit losses to nonaccrual loans 708.74% 914.96% 3616.17% 5057.74% 3370.68%

Asset quality remained steady during the fourth quarter of 2024, with nonperforming assets increasing to $1.2 million, which represents 0.11% of total assets. The increase of $277 thousand was primarily related to one loan and a specific reserve of $100 thousand was recorded. The allowance for credit losses as a percentage of total loans receivable decreased to 1.12% at December 31, 2024, compared to 1.13% at September 30, 2024, and 1.19% at December 31, 2023. The allowance for credit losses increased by a provision for credit losses of $123 thousand offset by net charge-offs of $6 thousand, during the fourth quarter of 2024. In the fourth quarter of 2023, the Company experienced net recoveries of ($1) thousand and decreased the ACL with a provision for credit release of ($38) thousand.

Footnotes to table located at the end of this release.

LOAN COMPOSITION – Unaudited As of Dec 31 Sep 30 Jun 30 Mar 31 Dec 31($ in thousands) 2024 2024 2024 2024 2023Commercial real estate $ 463,301 $ 456,775 $ 450,936 $ 434,743 $ 433,687Consumer real estate 204,303 193,362 188,759 184,969 177,102Commercial and industrial 65,980 66,561 76,149 77,023 63,946Consumer and other 20,154 22,521 23,589 28,499 30,937Total loans, net of deferred fees 753,738 739,219 739,433 725,234 705,672Less allowance for credit losses 8,434 8,317 8,498 8,497 8,393Total loans, net $ 745,304 $ 730,902 $ 730,935 $ 716,737 $ 697,279DEPOSIT COMPOSITION – Unaudited As of Dec 31 Sep 30 Jun 30 Mar 31 Dec 31($ in thousands) 2024 2024 2024 2024 2023Noninterest-bearing $ 227,471 $ 219,279 $ 220,330 $ 212,083 $ 210,604Interest-bearing:DDA and NOW accounts 140,116 150,312 132,186 139,229 144,039Money market accounts 381,602 362,834 325,769 307,696 289,158Savings 40,627 41,184 42,479 44,191 45,558Time, less than $250,000 120,397 133,940 128,869 125,248 121,035Time, $250,000 and over 41,198 44,399 50,166 52,862 48,203Total deposits $ 951,411 $ 951,948 $ 899,799 $ 881,309 $ 858,597Footnotes to tables:(1) Total revenue is the sum of net interest income andnoninterest income.(2) Annualized for the respective period.(3) Noninterest expense divided by the sum of net interest income and noninterest income.(4) Includesnoninterest-bearing and interest-bearing DDA and NOW accounts.(5) The tangible book value per share is calculated as total shareholders' equity less intangible assets, divided by period-end outstanding common shares.

ABOUT FIRST RELIANCE

Founded in 1999, First Reliance Bancshares, Inc. (OTC: FSRL.OB), is based in Florence, South Carolina and has assets of approximately $1.067 billion. The Company employs approximately 170 professionals and has locations throughout South Carolina and central North Carolina. First Reliance has redefined community banking with a commitment to making customers' lives better, its founding principle. Customers of the Company have given it a 92% customer satisfaction rating, well above the community bank industry average of 82%. First Reliance has also received “the Best Places to Work in South Carolina award” for 19 years consecutive years. We believe that this recognition confirms that our associates are engaged and committed to our brand and the communities we serve. The Company offers a full range of personalized community banking products and services for individuals, small businesses, and corporations. The Company also offers a full suite of digital banking services, Treasury Services, a Customer Service Guaranty, a Mortgage Service Guaranty, and First Reliance Wealth Strategies.

FORWARD-LOOKING STATEMENTS

Certain statements in this news release contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, such as statements relating to future plans and expectations, and are thus prospective. Such forward-looking statements include, but are not limited to, statements with respect to our plans, objectives, expectations and intentions and other statements that are not historical facts, and other statements identified by words such as “believes,” “expects,” “anticipates,” “estimates,” “intends,” “plans,” “targets,” and “projects,” as well as similar expressions. Such statements are subject to risks, uncertainties, and other factors which could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. Although we believe that the assumptions underlying the forward-looking statements are reasonable, any of the assumptions could prove to be inaccurate. Therefore, we can give no assurance that the results contemplated in the forward-looking statements will be realized. The inclusion of this forward-looking information should not be construed as a representation by the Company or any person that the future events, plans, or expectations contemplated by the Company will be achieved.

The following factors, among others, could cause actual results to differ materially from the anticipated results or other expectations expressed in the forward-looking statements: (1) competitive pressures among depository and other financial institutions may increase significantly and have an effect on pricing, spending, third-party relationships and revenues; (2) the strength of the United States economy in general and the strength of the local economies in which we conduct operations may be different than expected resulting in, among other things, a deterioration in the credit quality or a reduced demand for credit, including the resultant effect on the Company's loan portfolio and allowance for credit losses; (3) the rate of delinquencies and amounts of charge-offs, the level of allowance for credit loss, the rates of loan growth, or adverse changes in asset quality in our loan portfolio, which may result in increased credit risk-related losses and expenses; (4) the risk that the preliminary financial information reported herein and our current preliminary analysis will be different when our review is finalized; (5) changes in the U.S. legal and regulatory framework including, but not limited to, the Dodd-Frank Act and regulations adopted thereunder; (6) adverse conditions in the stock market, the public debt market and other capital markets (including changes in interest rate conditions) could have a negative impact on the Company, including the value of its MSR asset; (7) the business related to acquisitions may not be integrated successfully or such integration may take longer to accomplish than expected; (8) the expected cost savings and any revenue synergies from acquisitions may not be fully realized within expected timeframes; and (9) disruption from acquisitions may make it more difficult to maintain relationships with clients, associates or suppliers. Moreover, a trade war or other governmental action related to tariffs or international trade agreements or policies, as well as Covid-19 or other potential epidemics or pandemics, have the potential to negatively impact ours and/or our customers' costs, demand for our customers' products, and/or the U.S. economy or certain sectors thereof and, thus, adversely affect our business, financial condition, and results of operations. All subsequent written and oral forward-looking statements concerning the Company or any person acting on its behalf are expressly qualified in their entirety by the cautionary statements above. We do not undertake any obligation to update any forward-looking statement to reflect circumstances or events that occur after the date the forward-looking statements are made.

Contact:Robert HaileSEVP & Chief Financial Officer(843) 656-5000rhaile@firstreliance.com

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SOURCE First Reliance Bancshares, Inc.

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